Gedanken zur Lösung des Goldproblemes von Bill Murphy (Gata)

verfasst von R.Deutsch, 17.06.2001, 11:48

This is what I think is going on.

For the past year I have asked my GATA delegation colleagues what
could be done to solve the gold problem. That is, say I am the
president of the United States, I know GATA is right,and I have
called the Howes and Venerosos in, seeking suggestions on the best
way to undo the gold mess created by the Clinton administration.

My colleagues have mostly answered,"I don't know." To illustrate
just how serious and complicated the gold problem is, Frank
Veneroso's specialty was crisis management. The finance ministers of
Chile and Mexico called on Frank to help them solve economic crises.
He knew just what advice to give them. But on gold he draws a blank.

In recent Midas commentary, I have mentioned some anecdotal
information about the government's main bank, J.P. Morgan Chase, like
its stopping as many of the June Comex gold deliveries as possible.
GATA also knows that the president, economic adviser Lawrence
Lindsey, and Treasury Secretary Paul O'Neill are very aware of the
gold problem. We also know that the volatility in the gold price has
increased dramatically in the past month and that the lease rates
remain high.

My hunch is that to minimize damage in the unwinding of the gold
fraud, the Bush Administration directed that the gold lease rates be
taken to high enough levels to shrink the contango and discourage
forward selling. That would tend to reduce the total number of short
positions. That was the first step.

Step 2 would be to increase the gold volatility in a deliberate
effort to warn market participants that a big gold event is coming
and that to be overly short or too aggressive in writing calls is
liable to be very dangerous, or even fatal, in the very near future.

They probably know that J.P. Morgan Chase has to be bailed out
officially by the U.S. government in some way -- under the"too big
to fail" principle. Their short position is just too big to be
covered. How they will present this to Congress and the American
public is hard to say. What they must be trying to do now is reduce
the collateral damage to other gold shorts that will happen when they
let the gold price go.

With increasing volatility before the gold price takes off, a good
number of gold market players should be scared out their vulnerable
gold short positions, and out of their potentially disastrous written
call option positions. The goal must be to have the Comex open
interest as low as possible when the gold price explodes. And, in
fact, the gold Comex open interest right now is an extremely low
118,677 contracts.

That J.P. Morgan has taken in thousands of Comex gold contracts also
fits, as it will make it harder for longs to squeeze Comex in the
coming gold debacle, or cause an exchange default.

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gesamter Thread:

• Gedanken zur Lösung des Goldproblemes von Bill Murphy (Gata) - R.Deutsch, 17.06.2001, 11:48
  • BAILOUTS, SACRIFICIAL GOATS, CRONY CAPITALISM - black elk, 17.06.2001, 12:21
  • Sind die Lease Rates denn wirklich hoch? Ich denke nein. Wunschdenken. (owT) - Talleyrand, 17.06.2001, 12:25
    • Re: Sind die Lease Rates denn wirklich hoch? Ich denke nein. Wunschdenken. (owT) - Diogenes, 17.06.2001, 14:14
      • ...aber mit dieser Tinte werden sie leider noch um sich schmeissen! (owT) - Tofir, 17.06.2001, 23:28
        • :-))) alles kommt zu dem der warten kann... (owT) - Diogenes, 18.06.2001, 11:55